Month: November 2018

Have you stopped to think about how fast we all are running now? Our work is flat out, we are constantly connected via smart phones, and our personal lives are running just as hard. Life is a juggle and a lot of the time we can feel like we are paddling like crazy under the water – just like the proverbial duck.

In this environment, money – and even more importantly; debt, play a huge role in the stress of keeping your head above water.

Australians have one of the biggest household debt ratios in the world.

Our mortgages are huge and our credit cards are racked up. To the outside world this may look like you have a great house, nice car; go on good holidays and have it all.

But internally, as I know from personal experience, this means living inside the money trap – paying off one card, to rack up another. Stretching to pay the mortgage every month and always having that back of mind worry feeling about money.

It wasn’t too many years ago that I was on that treadmill. Big mortgage for the dream house, big leases on very nice cars and credit cards that never went down to zero. And for a long time there, I thought that was OK. That I could handle it, and that I had everything I wanted. But after a while, the shine wore off all the things I thought I couldn’t live without. And the stress of maintaining them only got bigger.

While I was not able to change everything all at once about my life, the first and important thing my husband and I did was come to the realisation that the house and all the stuff were not what made us happy. Being with our kids, and enjoying friends and family was where the joy was.
We also wanted to change the way we worked and have freedom to not do work we no longer enjoyed. This meant we had to undo all the things we had set up about our lives. We sold our house, paid down our credit cards to zero, and worked toward eventually owning our cars outright.

We also built a safety net account that will see us live for six months if no money came in the door at all, and got our insurance and wills/estate planning in order with a great financial planner. Now I am not saying it was fun, and there was a lot of stress along the way. There was also a fair amount of swallowing pride. It took five years to really turn it all around, and there were many nights spent wondering was it all worth it.

But I am here to say – it was. Until you no longer have a big fat financial burden on your back, you really don’t know just how heavy it was. When I sit in the traffic and see so many angry faces, frustrated people and short tempers, I know without a doubt, much of it is caused by the crazy pace, and the stress of making ends meet.

If deep down you know you are in a money trap, maybe its time to think differently about your life. About what really makes you happy. To start the process, I have created a Reinvention Journal to help you on your way. It’s free here and you can start filling it out to see what really matters to you, and the true financial position you are in. Only when you are clear on these two things can you really start to change your life and leave the money trap behind.

It’s not easy, it is not quick and there’s a whole lot of dumping pride in the process. But I can promise you, that long term change to move toward a life you really want, could be the most important thing you do in your adult life. Use your years wisely, as you cannot get them back.

You can change your life. Take the first step. I am here to help.

Until next time

There is a phenomenon on social media at the moment in China called ‘flaunt your wealth’. The idea is people lying next to their luxury car as if they have fallen out, with their personal belongings from their bag spread around them. These items are luxury products that prove how much they have to spend. Their hashtag on Instagram is #fallingstars

It occurred to me when reading about this in the press that this is a prime example of people who want to show that they are rich. But the bigger question is – are they wealthy?

In today’s world of brands and relatively easy access to credit, it has not been too hard for people to look like they are rich. European cars, clothes with high end labels all over them, and jewellery and handbags to give the display of money.

What has not always gone with this display is real wealth. While rich may be all the luxury items that are displayed to the world, a lot of the time those people have no real assets that they own, and no liquidity or cash if they needed it. Many are living from one pay cycle to the next while paying off all the beautiful things they own – which instantly lose value and keep them in a cycle of debt.

While the #fallingstars might be the extreme of these examples, the different between rich and wealthy is obvious at home too. It’s why as a nation we are in a massive amount of personal debt, and mortgages are so high. While many of us aspire to the finer things in life, much of the time we can’t really afford them. So what starts as ‘treat yourself to the best’ becomes a life trapped in an endless cycle of paying for what you never could really afford.

Wealthy people have multiple income streams, lots of assets they own and they keep their overheads as low as possible to maintain a standard of living that is comfortable but not wasteful.

Those who are rich have lots of leased or financed items they never own, lots of debt, and are constantly juggling to pay one thing or another. While rich might look more glamorous on the outside, it is a whole lot better to be wealthy.

A simple trip to the mall will demonstrate how easy it is to fall into the trap of wanting things you don’t need. Of justifying a high price with an “I deserve it” attitude. In fact, malls are some of the most dangerous places to be until you truly understand the difference between rich and wealthy.

Because wealthy people can walk through a mall, have a purpose for being there, and bypass everything else unless it represents true value. Whereas someone with a rich mindset will be sucked into whatever is the latest beautiful thing they see.

I have decided in my 40’s that being wealthy is my true goal. Of course getting there isn’t easy. It requires budgeting, saying no, sacrificing and making sensible decisions. It’s definitely the harder road in the short term. But long term, this mindset is the real ticket to a much easier life. So, if you have been acting more like someone who is rich than wealthy, maybe it’s time to assess what you really want out of life. It is still serving you and bringing you happiness?

Because wealthy equals freedom – something we all want.

Here’s to a wealthy mindset

Until next time,